Companies have independent legal personality, can operate and develop independently, and can bear responsibilities. Therefore, they can invest in the name of the company. However, companies have their own characteristics and restrictions. Do you know what types of ODI investments companies can make? Below, we will introduce them to you in detail, hoping to be helpful.
ODI investment is classified into equity investments and debt investments according to the different equity ownership of the invested enterprises
Equity investments form the capital of the invested enterprise, while the investing enterprise owns the equity of the invested enterprise. Examples include purchasing stocks of listed companies, merger and acquisition investments, and joint venture investments.
Debt investments form the liabilities of the invested unit, and the investing enterprise is the creditor of the invested unit. They include purchasing various types of bonds and leasing investments. Compared with external equity investments, debt investments have the characteristics of smaller investment rights and lower risks.
ODI investment is classified into physical investments and securities investments according to the different investment methods
Physical investment is a type of direct investment, which refers to directly investing cash, physical assets, intangible assets, etc. into other units and directly forming the capacity for production and operation activities, creating necessary conditions for engaging in certain production and operation activities. It has the characteristics of being closely related to production and operation, longer investment recovery period, slower investment realization speed, poor liquidity, etc. Physical investments include joint venture investments, merger and acquisition investments, etc.
Securities investment is a type of indirect investment, which refers to using cash, physical assets, intangible assets, etc. to purchase or acquire securities (such as stocks, bonds, etc.) of other units as ODI investment.
ODI investment is classified into short-term investments and long-term investments according to the deadline for the recovery of investment funds
Long-term investments refer to valuable securities that are purchased and not intended to be liquidated at any time and have a holding period of more than 1 year, as well as other ODI investments that exceed 1 year.
Short-term investments refer to securities that can be liquidated at any time. They have a holding period of no more than 1 year, as well as other investments of no more than one year. The purpose of short-term investments is to use idle funds in production and operation temporarily to seek profits. The valuable securities purchased by investment are usually the securities that are active and easy to withdraw in the securities market.
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